Public transportation

The Days of Paying More to Live Near the Metro Are Coming to an End

Fewer people are willing to pay a premium to live near a subway stop as public transportation stumbles and ride-sharing offers better options.

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Until recently, the best way to get around many big cities was to use public transportation. Homes with easy access to subway systems therefore commanded a premium. Consumers were willing to pay more to avoid having to drive and pay for parking, or to walk a long distance to the metro in bad weather.

That's starting to change, according to a new report from MetLife. Uber, Lyft, and other ride-sharing options are reshaping cities, giving people greater flexibility in where they live and how they commute. Combine that with the struggles of several major mass transit systems, and that means there's less reason to pay a few hundred dollars extra every month to be close to the subway.

"Advances in transportation have shaped the form, pace, and direction of real estate demand throughout the nation's history," Metlife's analysts conclude. "We believe that the advent of ridesharing services and the widespread adoption of autonomous, electric vehicles will do so once again."

In San Francisco, for example, the MetLife report finds that properties near metro stations typically fetched a 20 percent premium over similar properties in other locations. That premium has been on the decline since Uber and Lyft started operating in the city. (Uber launched in 2010, Lyft in 2012). It now averages about 15 percent.

MetLife

As with taxi companies that invested in expensive medallions that were worth more because cities limited their supply, some people will see a downside from the evaporation of an artificial bonus on certain properties. Those who own homes and condos along metro lines in major cities might learn they paid extra for an geographic advantage that won't exist when they try to sell their real estate later.

But this is mostly a positive development. It will allow more people to live where they want. It could also change the calculus for developers, encouraging them to build more homes outside of rigid public transportation corridors.

"One of the first major impacts," the MetLife report suggests, "will be the increased value of development sites with good access to uncongested roadways, but limited access to public transportation."

More options for getting around should be welcomed, particularly when so many public transit systems are beset by mismanagement, cost overruns, maintenance problems, and general operational shittiness. More people relying on ride-sharing services could add to congestion on city streets, of course, but there are solutions to that problem—like conjestion pricing and other fee structures—that distribute those costs efficiently.

By reducing the premiums required to live near a burning subway line, Uber and company aren't just changing how we move around a city. They're giving us more power to choose where we live, too.

NEXT: If You Shot a Man in Reno, Why are You in California State Prison?

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  1. Uber, Lyft, and other ride-sharing options are reshaping cities, giving people greater flexibility in where they live and how they commute.

    NO ONE PLANNED FOR THIS.

    1. “NO ONE PLANNED FOR THIS.”

      SO WHAT?

      1. How would your chess match go if the pieces started moving themselves around the board to serve their own individual interests? All your hard strategizing would be for naught. That’s the situation city planners are in right now.

        1. It’s like someone else is controlling the mouse in Sim City.

        2. That’s why libertarians play go.

      2. The Reason Foundation is owned/controlled by… a transportation planner.

        1. That does help explain why I’ve seen this same story at least a half-dozen times this year. They do like to flog their hobby horses mercilessly.

          1. I will take my hobby horse for vomiting over public transit any way.

            1. * commuting. Good one, autocorrect.

      3. San Francisco isn’t gonna get caught in a regulation deficit again!
        “NO ONE PLANNED FOR THIS.”

        Posted in the Lynx:
        “SF to transportation startups: Play nice, get permits, share data”
        […]
        “”I don’t even want to speculate what it will be ? dockless jet packs?” said Jeff Hobson, the transportation authority’s head of planning.”
        https://www.sfchronicle.com/business
        /article/After-scooter-invasion-is-
        San-Francisco-ready-12885947.php

        He has no idea what it might be, but it’ll get regulated early and often.

        1. Once more, with editing:
          MatthewSlyfield|5.4.18 @ 11:59AM|#
          “NO ONE PLANNED FOR THIS.”

          Posted in the Lynx:
          San Francisco isn’t gonna get caught in a regulation deficit again!

          “SF to transportation startups: Play nice, get permits, share data”
          […]
          “”I don’t even want to speculate what it will be ? dockless jet packs?” said Jeff Hobson, the transportation authority’s head of planning.”
          https://www.sfchronicle.com/business
          /article/After-scooter-invasion-is-
          San-Francisco-ready-12885947.php

          He has no idea what it might be, but it’ll get regulated early and often.

  2. “Advances in transportation have shaped the form, pace, and direction of real estate demand throughout the nation’s history,” Metlife’s analysts conclude. “We believe that the advent of ridesharing services and the widespread adoption of autonomous, electric vehicles will do so once again.”

    Ooooh, they’re not going to like you referring to ride-sharing services and cars of any sort as an advance in transportation. Railroads are the wave of the future, that’s progress.

    And you know why? Look at your first sentence – “advances in transportation have shaped”. We ain’t having that any more. We’re not going to let the future shape us, we’re going to shape the future. We say the future is railroads so we’re going to cram railroads down your throat whether you like it or not. This bullshit of having the market, the collective will of the people, decide how things develop is done. We’re in charge now and we’ll decide what the will of the people is – it’s what we decide the will of the people should be and would be if they were half as enlightened as we are instead of a bunch of retarded sheep fit only for being herded to the shearing shed.

    1. Well, to be quite honest, “the people” is always everyone but you. What these bureaucrats do in your name is for your own good..

  3. A recent HGTV House Hunters episode: looking at a condo in Chicago; elevated trains run right by windows. Agent: “Yeah, but the station is one block away and you can be down on the Loop or at Wrigley Field in only a few minutes.”

    1. “Are your ducts old and tired?”

  4. Yes, it could only be Uber and such that caused this. There are no other factors than internet-enabled jitneys in play here.

    1. By all means, tell us what we missed.

  5. the MetLife report finds that properties near metro stations typically fetched a 20 percent premium over similar properties in other locations.

    Golly. And yet anyone who advocates that that sort of infrastructure should be paid for via land tax rather than some other tax on everyone else is viewed as a near-commie.

    1. “Golly. And yet anyone who advocates that that sort of infrastructure should be paid for via land tax rather than some other tax on everyone else is viewed as a near-commie.”

      Who would that be?

    2. Raising the price for a subway ticket would reduce the value added to a home for being near a subway. There is no need for an extra real estate tax for homes near subways.

      1. There is a need to split the costs of that sort of infrastructure – capital costs to landowners via a land tax (NOT a prop tax); operating costs to passengers via fares. Otherwise – what happens is that renters pay more in rent, and pay for their fares too – and landowners get more rent for having provided nothing (the location itself did the work of generating that extra rent) and the increased land value from future buyers as well. It is exactly the rentier economics that Henry George pointed out – and that Friedman/WFBuckley/AJNock and David Nolan all mostly agreed with George re the analysis (not necessarily the prescription).

        It isn’t the freaking cost of a ticket that changes the home value. It’s the reverse actually. The more the infrastructure is subsidized by someone other than the land beneficiary, the more the rentier gets for themselves.

        Don’t get me wrong. I’m not a fan of govt-operated mass transit at all. But the infra does increase land value. And the people who benefit from that and lobby for it should also help pay for it. Maybe if they DID pay for it, they would force govts to be more creative about what mobility infrastructure should look like and would stomp on stuff that doesn’t actually add value. Instead, they just go for the free lunch.

        1. Just to give one glaring example of how this failure to make the right people pay can distort things.

          Parking lots right next to the station obviously generate more rent than lots further away. It ain’t the quality of the asphalt that causes that. And if prop taxes rather than land taxes pay for it, then it can actually disincent development of housing near the station – thus undermining the function and the business model of the actual transportation. The lot owner can reap the additional rent without having to DO anything – esp in a place like CA where prop taxes themselves are a cronyist rentier mess.

  6. What is “402 bps”? It’s a poorly designed chart. The red arrow just below the green box implies that s where Uber and Lyft added carpooling, but the green line implies that is the carpooling point.

    Still, the curve is reasonably clear, so there’s that.

  7. I live in MD and work in DC and take the metro almost exclusively for one reason: transit subsidies from my employer. It’s a funding funnel (government to WMATA) around here that will be tough to disrupt.

    1. yeah, in the bay area, for some reason money you use for bart is tax exempt. that’s a nice subsidy… and still they can’t cover costs.

    2. $260/month for every government employee.

  8. Most people just don’t like Public Transportation. When will the left understand that?

    Even in the 20s, 30s, and 40s, when it was more expensive and actually took longer to get around or between cities than using rail, Americans still preferred their cars.

    Nah let’s keep trying to force people into what we want…. . Let’s raise the gas tax in CA, and not use it to maintain or expand roads, but to build light rail stations in LA and bike lanes no one will use

  9. The big factor where I live is that most new jobs are being created in the suburbs instead of where public transportation takes you. Something about high wage taxes in the city vs no wage tax in the suburbs seems to discourage business managers from locating in the city.

    Also, public transportation provides poor service. I used to live close to a trolley stop that was very convenient for getting me to work, but the transit company decided to cut the number of trolley runs in half. After that, I was never able to get a trolley because it would be filled up at prior stations on the run.

    The increasing number of jobs that allow work at home is also a factor. I was the manager of a team that had three members out of eight that worked at home in other states. Why pay high rent to live anywhere in the San Francisco metro area when you can live somewhere where the cost of living is lower?

    1. ^ This is an excellent point.

      I have a 4 person staff and 3 are full time work from home. Myself and one other works from home ~2 days a week.

      People who praise public transit and want to force everyone onto public transit still have an industrial revolution mentality. All the workers from the outer rings of town use transit to get to their factory jobs in the inner city.

      Their view hasn’t evolved even though we have. It’s like when Trump pulls out mercantilism; he’s stuck in that old way of thinking too.

  10. The biggest disappointment from Musk’s Boring operation was the announcement that they would focus on pedestrian and bicycle traffic.

    The exciting aspect of pneumatic tubes isn’t the speed, safety, and energy efficiency. The exciting thing about it was that it solved the last mile problem of mass transit. It was supposed to be mass transit for your car. You get to use mass transit without ever leaving your car.

    Take that out of the equation, and you’re just another monorail.

    1. the problem with mass transit isn’t just the last mile problem. Your car simply gives you freedom that mass transit by its very nature wont.

      Or put another way, when Bart train operators strike because they want to be paid more than 90k a year, I don’t give a fuck because I’m not dependent on you.

      1. That’s what the Boring/pneumatic tube was supposed to give you.

        You drive your car to a Boring Company ingress, and now it’s in the mass transit system. You drive out of an egress, and now you’re driving yourself around again.

        The innovation was mass transit for cars–not replacing cars with mass transit or using cars for mass transit.

        When they decided to focus on pedestrians and bicyclists, they got rid of all the excitement.

        People who don’t give a shit about the environment still want to be able to drive their car onto a mass transit track.

        Making us have to become a pedestrian or a bicyclist is the main reason why so many people don’t use mass transit. Why invent a solution to that problem–and then ignore it? They holes they’re “boring” don’t have to be as big to accommodate pedestrians, but so what? Show people what solving the last mile problem looks like, and dig half as many tunnels–but without solving that last mile problem, you’re just another subway. No one gets excited about a subway. We’ve had those for more than 100 years.

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